These ratings are restated from the Ratings
Report indicated above, which was produced outside the European Union, and
therefore are not issued by The Economist Intelligence Unit credit rating
agency, which is registered in accordance with Regulation (EC) No 1060/2009 of
16 September 2009, on credit rating agencies, as amended. This report and the
ratings, therefore, are not issued pursuant to such Regulation and do not fall
within its scope.

In The Economist Intelligence Unit's latest ratings report, in December, the score worsened by 1 point, to 24. The rating remained firmly in the middle of the A band, owing to the comparatively low public debt/GDP ratio and the relatively small budget deficit. Strong economic fundamentals ensure that the government is unlikely to face problems in obtaining funding, and a commitment to servicing the country's debt is shared across the political spectrum.

Currency risk

The score improved by 1 point to 26, and the rating remained at A. An improved economic and institutional outlook for the euro zone has increased the bloc's resilience to political risk and external shocks, and structural support for the currency comes from a large regional current-account surplus. We expect the euro to average US$1.21:€1 in 2019-20, after US$1.18:€1 in 2018.

Banking sector risk

The score remained at 28 and the rating remained at A. Banks have relatively strong liquidity and capital-adequacy ratios, and are fairly well protected against potential shocks arising from robust recent loan growth, especially in the housing market. This strong growth has led the regulator to introduce a 1.25% countercyclical capital buffer.

Political risk

In March 2018 the government, in place since 2016, survived its most serious crisis to date. The prime minister resigned and the coalition was severely weakened, increasing the risk of an early election. Political risks to the rating are minimal, however, as none of the mainstream parties presents a threat to Slovakia's international creditworthiness.

Economic structure risk

The economy is heavily reliant on industrial exports, primarily to other euro zone members and to regional neighbours, owing in large part to a dominant automotive sector. This will continue to support growth in the coming years, but makes the economy vulnerable to a potential downturn in the region.